15th June 2016
With only 7 days until the EU Referendum Vote, the word on the tip of everyones tongue is BREXIT. As the countdown to the vote is fast approaching, this post looks at the implications a leave vote could have on the UK construction industry.
The British Chamber of Commerce say that 55% of members back staying in a reformed EU. When it comes to businesses- most large companies tend to be in favour of Britain staying in the EU because it makes it easier for them to move money, people and products around the world. Since the EU was established in 1993 no one has withdrawn which is why the impact of the referendum is hotly debated.
The skills shortage within the UK construction industry has reached an 18 year high, meaning that the possibility of a leave vote could worsen the current situation. A fundamental piece of EU legislation is the right to free movement, making immigration between member states relatively simple.
The UK construction industry relies heavily on European labour. According to the Office for National Statistics nearly 12% of the 2.1 million construction workers come from abroad; with Poland and Romania being the most common countries of origin. A leave vote would mean that these foreign workers would find emigration to the UK more difficult. UK Construction companies would also have to comply with new visa laws if they wished to continue to employ other EU nationals.
On the other hand, with a leave vote likely to result in a skills shortage, it’s possible that this could lead to more investment in training and upskilling local workers to fill the gaps.
A recent survey by Build Magazine highlighted that Brexit would lead to 60% less foreign investment, resulting in material costs increasing by 53%. EU membership allows free movement of goods across member states through the elimination of customs duties and quantitative restrictions. A leave vote will have implications for construction companies who import and export materials within the EU.
At present, member countries of the EU benefit from the right to trade with other EU members based on current legislation. If the UK vote leave, companies that export materials within the EU would need to comply with new EU regulations in the relevant EU state. This would also create a limbo phase for companies while the new laws are being put in place, creating even more uncertainty for the construction industry.
A recent survey, carried out by accountants Smith and Williamson, showed that an overwhelming proportion (85%) of construction and real estate companies backed the UK’s continued membership of the EU. This figure is not surprising considering the knock-on effects a leave vote would have on the construction industry.
The vote is set to take place on Thursday 23rd of June, with a lot of contradictory arguments across industries it’s important to know the facts and how a British exit could affect your organisation. The countdown to the vote is on, and the time has come to decide are you IN or OUT?